Sustainable horticultural products in Indonesian traditional retail market

Abstract

Red chili, cayenne pepper, shallot, and garlic are horticultural products that are very important for the essential ingredients of various cuisines in Indonesia. Although household expenditure on those products is relatively small compared to total food expenditure, the government pays great attention to its price movements. This study aims to analyze price behaviour at the retailer level in traditional markets. The data used in the study are obtained from the National Strategic Food Price Information Center (PIHPSN) of the Central Bank of Indonesia, the daily price data for horticultural products at the wholesale and retail market levels. The regression model built in this study was estimated using the 3SLS method. The results showed that horticultural product retailers in traditional markets tried to stabilize prices. However, the results cannot conclusively conclude the existence of averaging price practices. This research also showed a spill over effect of rice's retail price on the price of horticultural products in traditional markets. This study's results are expected to help formulate government policies to stabilize food prices at the consumer level.